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Student can seek refund even if fees are non-refundable

The Supreme Court, in the Bihar School Examination Board v/s Suresh Prasad Sinha case, held that a student was not a consumer. This decision was given in respect of conduct of exams by boards and universities. In course of time, relying on this judgment but forgetting the context in which it was rendered, it was held that a student could not file a consumer complaint for deficiency in services by educational institutions.

| TNN | Updated: Aug 1, 2016, 09:58 IST

The Supreme Court, in the Bihar School Examination Board v/s Suresh Prasad Sinha case, held that a student was not a consumer. This decision was given in respect of conduct of exams by boards and universities. In course of time, relying on this judgment but forgetting the context in which it was rendered, it was held that a student could not file a consumer complaint for deficiency in services by educational institutions. Now, through a landmark ruling, the Maharashtra state commission has differentiated between services rendered by educational institutions, and conducting of exams by boards and universities.Case Study: Chitralekha Bendke had two children who secured admission to Seven Square Academy. The requisite fees of Rs 7,800 per child were also paid. Due to medical reasons, she applied for cancellation of admission and refund of fees. As refund was not given, she filed a complaint before the Thane District Forum, which ordered the fees to be refunded.

The school appealed against this order, contending that the consumer complaint was not maintainable since imparting of education could not be termed a service and a student could not be considered a consumer. The school also challenged the maintainability of the complaint against it instead of against the Trust which ran the school.

The state commission differentiated between imparting of education by educational institutions and conducting of exams. It observed that the complaint was in respect of non-refund of fees, and not about conducting examinations. There were several judgments, including a five-member bench judgment of the National Commission in the case of Bhupesh Khurana &Ors. v/s Vishwa Buddha Parishad, where it was held that imparting of education by educational institutions for consideration falls within the ambit of service. So complaints about deficiency in service in respect of non-refund of fees, running of courses without recognition or affiliation, etc. would be maintainable before consumer fora.

The commission observed that the receipt for fees paid by Bendke was issued by the school and not by the Trust. Hence the complaint against the school was held to be maintainable.

On merits, the commission observed that the fees were paid in January, and request for refund was made within a few days, well before commencement of the academic year in June. There was ample time to fill up the seats which had fallen vacant. The school had also failed to produce any documentary evidence to show that the cancelled admission had resulted in the seats remaining vacant for the academic year.

The commission observed that even though it is a known fact that there are more candidates than available seats. educational institutions generally take a false plea that the cancelled seat remained vacant. Admitting another candidate without refunding the fees of a student who has withdrawn results in double enrichment. Such institutes have become commercial shops, and there cannot be any worse form of unscrupulous and unfair trade practice in the field of education. The objective of the Consumer Protection Act is to curb such practices where students and their parents are exploited.

Accordingly, by its judgment of July 1, delivered by judicial member Ushal Thakare for the bench along with Dhanraj Khamatkar, the Maharashtra state commission concluded that a clause stating that fees once paid shall not be refunded is unconscionable and void, as a service provider cannot retain the money when no service has been rendered. The school’s appeal was rejected.

Impact: A student can seek a refund even if receipt states that fees are non-refundable.

(The author is a consumer activist and has won the Govt. of India’s National Youth Award for Consumer Protection. His email is jehangir.gai.columnist@outlook.in)

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